1. Bill of Lading

2. Learning target:
1. What are B/L and its function?
2. Key classification of B/L.
3. What are AWB and its function?
4. What is the difference between B/L and AWB?
5. What is multi-modal transport and the main document involved?

3. Transport documents can be described as the receipt evidence issued by carriers to the exporters and acts as the documents of necessity for cargo delivery, complaints as well as settlement or negotiation to banks. According to different modes of transportation, shipping documents mainly refer to marine bill of lading, seaway bills, airway bills, railway bills, multi-modal transport documents, etc. This chapter will mainly illustrate marine bill of lading, airway bill, airway bill and multi-modal transport documents.

4. 1 marine bill of lading
1.1 Definition and functions of marine bill of lading
Marine bill of lading or ocean bill of lading, abbreviated as bill of lading (B/L), in accordance with the regulations in Maritime Law of People’s Republic of China, means a document which evidences a contract of carriage by sea and the taking over or loading on board of the goods by the carrier, and by which the carrier undertakes to release the goods against surrendering of the document.

5. In accordance with the definition of marine B/L, its functions are mentioned below:
B/L is evidence of the contract of carriage between the consignor and the shipping company. The rights and obligations of the two parties are listed on the B/L.
B/L is a receipt for the goods issued by the ship owner or his agent evidencing the receipt of the goods mentioned in B/L.
B/L is a document of title to the goods. Any lawful holder of B/L may take the delivery of the goods from the shipping company against the B/L, or transfer the title to the goods by transferring the B/L or secure loans against the B/L from the bank before the arrival of the shipment.

6. 1.2 Parties in marine bill of lading
Parties in marine bill of lading include carrier, shipper, consignee, notify party, transferee and the bearer.
Carrier. Carrier refers to such persons who sign the shipment contract with shipper as shipping company or charterer without shipping vessel.
Shipper. Shipper is the party who reach the shipment contract with carrier. Shipper could be the consignor or the consignee in accordance with the trade terms.
Consignee. Consignee may be the payee, bearer or the specified person written in named B/L. Importer is often the consignee.

7. Notify party. Notify party is the target one who is informed by the shipping company the arrival of shipment. Notify party could be importer or its agent.
Transferee. Transferee is the receiver of B/L after the endorsement or transfer and could claim the shipment to the carrier.
Bearer. Bearer is defined as the legal holder of B/L. The holder could be the consignee or the assignee.
Assignee - a person appointed to act for another

8. 1.3 Contents of bill of lading
The contents of a B/L consists of every liner company in the world has its own B/L form and clauses, but the basic contents are stipulated according to the International Convention for the Unification of Certain Rules of Law Relating to Bill of Lading. See B/L sample (9-1) for reference.
On the face of the B/L, the following particulars are to be noted:
Consignor /Consignee/Party to be notified/Name of the vessel/Ship’s nationality/Voyage/Port of shipment and port of destination/Freight

9. Number of the copies of the B/L, date, signature of the ship-owner or his agent or capital of the steamer.
Main particulars regarding the goods loaded on the steamer: description, marks, number of package, weight or measurement.
Declaration shall be made that the goods have been loaded on board in apparent good order and should be discharged at the port of destination or the port as near as the vessel may safely get and be always afloat.

10. 1.3.2 Clauses on the back of B/L
Clauses on the back of B/L can be classified into compulsory and non-compulsory. Compulsory clause restrains parties in B/L from breach maritime laws, international convention and harbors practices related. Non-compulsory clause is regulated by the carrier to define those which are not concluded adequately in compulsory clause. Clause on the back of B/L constitutes the evidence of liabilities and obligations and disputes settlement for parties involved in B/L. The contents of back clause are various for every signal carrier but normal contains the following items:

11. Definition for merchant;
Paramount clause for dispute settlement;
Jurisdiction Clause
Carrier’s responsibility and period of responsibility clauses;
Exception and claim clauses;
Packing and mark clause; Freight clause; Lien clause
Transshipment clause; Discharging and delivery clause
Animals, plants and on deck cargo clause
Dangerous cargo clause

12. 1.4 Key classification of B/L
shipped on board and received bill of lading
Criteria vary and classification of B/L could be various. According to whether the goods have been loaded on board the vessel, the B/L is divided into shipped on board B/L and received for shipment B/L.
A shipped on board B/L is evidence that the goods have been loaded on board a certain steamer. According to general trade practices, only the shipped on board bill of lading is accepted by banks for payment under a letter of credit.
A received for shipment B/L is evidence given by the ship owner that the goods have been received for shipment but have not yet been actually loaded on a particular ship. It is therefore uncertain whether the goods would be shipped or loaded on board a vessel within a short period of time.

13. 1.4.2 clean B/L and unclean B/L.
According to whether there are notes on the bill of loading, it falls into two kinds: clean B/L and unclean B/L.
A clean B/L shows that the goods have been shipped on board a vessel in apparent good order or condition. A clean B/L is issued to the shipper when the goods do not have any exterior defects at the port of shipment. Actually on every B/L, there are words “shipped in apparent good order and condition”. The carrier will not modify this statement if the goods are in good order, therefore making the bill of lading clean. The carrier undertakes full liability for the goods and will carry and deliver them in the same good order as he received them. The carrier will be liable if the goods are found damaged.

14. Unclean bills of lading are generally marked “insufficiently packed”, “carton old and stained”, “---packed in damaged condition” etc. But not all bills of lading which are noted are unclean bills of lading. The following kinds are not regarded as unclean bills of lading.
The notes do not indicate clearly that the goods or packing are unsatisfactory, e.g., “old packing” or “old carton” etc.
The purpose of the note is to emphasize that the carrier shall not be responsible for the risks resulting from the quality of the goods or packing.
The bank will not accept the unclean B/L until the buyer agrees accordingly.

15. 1.4.3 named, order and blank bill of lading
According to whether the B/L is transferable, it is divided into 3 kinds: straight B/L, order B/L, and blank B/L
A named B/L is made out so that only the named consignee at the destination is entitled to take delivery of the goods under the bill. The consignee is designated the shipper. The carrier has to hand over the cargo to the named consignee, not to any third party in possession of the bill. This kind bill of lading is not transferable. The shipper cannot pass the bill to a third party by endorsement. So the bill is of very restricted application. When the goods are shipped on a non-commercial basis, such as samples or exhibits, or when the goods are extremely valuable, a straight bill of lading is generally issued.

16. An order bill of lading indicates that the bill is made out to the order of any person named in such a bill. This kind of bill may be transferred after endorsement. When the bill is made out “to order of shipper” it is necessary for the shipper to endorse the bill either in blank or in full, to the consignee to whom he wishes the delivery of the goods is to be made. If the shipper does not endorse such a bill, he reserves the right to dispose of the goods to himself.
A blank bill of lading is also called open B/L or bearer B/L. It refers to the bill in which the name of a definite consignee is not mentioned. There usually appear in the box of consignee words like “to bearer” and the holder of the B/L can take delivery of the goods against the surrender of B/L.

17. 1.4.4 long form and short form of bill of lading
According to the contents of the B/L, it can be divided into 2 forms.
A Long Form B/L refers to the bill of lading on the back of which all the detailed terms and conditions about the rights and obligations of the carrier and the consignor are listed as an integral part of the bill. A long form B/L is applicable for all countries.
A short form B/L is a document which omits the terms and conditions on the back of the B/L. Only America accepts short form B/L.

18. 1.4.5 freight prepaid and freight to be collected bill of lading
According to the time for payment of freight, it can be divided into 2 types.
A freight prepaid B/L means that all the freight is paid by the consignor when the B/L is issued by the carrier.
A freight to be collected B/L refers to the B/L on which “freight payable at destination” is indicated.

19. 1.4.6 Master and house bill of lading
According to the issuance party of B/L, it can be divided into 2 categories.
A Master B/L means the B/L is issued by the actual carrier directly to the consignor.
A House B/L is issued by NVOCC （Non-vessel Operating Common Carrier）to the consignor under the authorization of the shipping company.

20. 1.4.7 Other Types of B/L：Ante-dated, On Deck and advanced bill of lading
Ante-dated B/L
When the actual loading date is slightly later than the date of shipment stipulated in the L/C, the carrier sometimes, at the request of the shipper, will issue the bill of lading to the shipper an ante-dated B/L so as to meet the requirement of the L/C. The shipping carrier does not issue ante-dated bill of lading.

21. On Deck B/L
On Deck B/L is issued when the goods are stowed on deck. The carrier shall not be responsible for the damage to and losses of the deck goods. In accordance with UCP600, the on deck B/L is not be accepted by the bank provided that specified in L/C.

22. 1.4.7.3 advanced bill of lading
Advanced bill of lading is issued at the date which is prior to the shipped on board date. Similar to anti-dated bill of lading, the advanced bill of lading is required by the shipper for meeting requirement specified in L/C. The shipping carrier does not issue ante-dated bill of lading.

23. 1.5 B/L Maritime Laws and Rules
International laws and rules critical to B/L are: General Rules of Law Relating to Bills of Lading (The Hague Rules) , Protocol to Amend the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading (The Visby Rules) and United Nations Convention on the Carriage of Goods by Sea, 1978 (The Hamburg Rules).
In China, Maritime Law in 1993 was the first law with regard to maritime transport and carriers. This law follows the belief of The Visby Rules and introduces some rational parts in The Hamburg Rules.

24. 1.6 Copies and disposal in case of loss
Every B/L has its original and negotiable forms in triplicate and non-negotiable copies. After one of the original B/L has accomplished the formality of taking delivery, the others stand null and void. The non-negotiable copies are only for kind reference.
Provided that the B/L is lost, when claiming cargo to the carrier, the consignee cannot deliver the goods until the shipper agrees the consignee with a bank’s letter of guarantee at hand to certify. The carrier requires publicly loss of B/L without any dissent for a certain period of and then releases the cargo to the consignee.

25. It is usual for a "full set" of bills of lading  to be comprised of three originals, but that is not to say, it cannot be more or less than this number, including perhaps just one sole original.
The reason why B/Ls are generally issued in more than one original, is that theoretically B/Ls are considered "documents of title". That is to say, (in theory) possession and  presentation of an original is generally required to release the underlying cargo from the carrier.
If one original is inadvertently lost, any of the other originals (depending on how the consignee has been defined) may be used for release. This is why it is important that when dealing with LCs, the full set of original B/Ls should be presented via the banking channels, so that a stray original does not fall into the wrong hands.

26. 1.8 Essentials of B/L review
(1) B/L must be clear and shipped on board B/L.
(2) B/L must not show “on deck shipment”.
(3) The head and the endorsement should be in completed correct.
（4）Loading date, port of loading, port of discharge and port of destination should be typed in accordance with L/C regulations. If port of discharge is overlapping, the country’s name should be added thereafter. And if the port of discharge is optimal, all port names should be listed as “OPTION LONDON/ROTTERDAM/HAMBURG" in this item. The optional ports should not be more than three in number and be on the same line. Provided that the shipment is transshipped during the cruise, the port of discharge should be transshipment port and the final port of destination should be shown in item “FINAL DESTINATION”.

27. (5) Shipment cargo should be the same with cargo description of invoice.
(6) Marking should be in conformity with that of invoice.
(7) "Freight paid”,” freight prepaid”,” freight to be collected" must appear on B/L in accordance with price term specified in the credit.
(8) The full set of B/L is a must in case of ordered B/L.

28. 2 airway bill and railway bill
9.2.1 Definition and function of an Air Waybill
Air waybill (AWB) is a receipt from the airline acknowledging the receipt of the consignment from the shipper and a contract of carriage between the airline and the shipper. An air waybill is equivalent to an ocean B/L, but it is not a document of title or negotiable instrument as a bill of lading, as the consignee takes the delivery of the cargo against of arrival notice given by the carrier. Hence collection cannot be used for the payment of the goods to be transported by air. AWB function can be read as followed:

29. AWB is a receipt for the goods issued by airline’s agent evidencing the receipt of the goods mentioned in AWB.
AWB is evidence of the contract of carriage between the consignor and the airline company.
AWB is the bill reference charged by the airline company.
AWB can be regarded as insurance policy.
AWB is a must for customs declaration.
AWB is the reference （Original 2） for air carrier business operation.

30. 2.2 Types of Air Waybill
According to the issuer, AWB can be divided into the two kinds:
Master Air Waybill (MAWB) means its issuer is air carrier and the shipping contract between the air carrier and air freight forwarding authorized agent.
House Air Waybill (HAWB) is issued by the authorized forwarding agent and constituents the contract between the forwarder and the consignor.

31. 2.3 Contents of an AWB and its key points
Unlike B/L, the contents of an AWB is tiny in difference in forms, since most airlines take the IATA (International Air Transport Association ) AWB known as neutral AWB to regulate the contents of an AWB, which concludes the following items:
First departure airport IATA code;
Name，address and account No. if necessary of the shipper and consignee;
Issuing carrier’s agent name, city, IATA code and account No. if necessary;
Dispatching dates and cruises including transshipment information;
Cargo description of; freight and rates;
Others for Customs, insurance and handling.

32. 2.3.2 Key points for attention in an AWB
Issuer of an AWB. Provided otherwise stipulated in L/C, the bank rejects an AWB issued by transport agencies.
Numbers of an AWB. An AWB has its triplicate originals, in which original 1 is for issuing carrier, original 2 is transferred to the consignee accompanying the flight and original 3 delivers to the shipper for Bill Purchased (B P).
The consignee indicated in an AWB. Only the consignee typed in an AWB has the right for cargo delivery, which should in strict conformity with regulations in L/C. The right can dully be transferred to the bank in case of blank indication of consignee in L/C.

33. 2.3.3 Essentials of Airway Bill
The bank will check the airway bill in accordance with the commercial invoice or the packing list related in the following essential aspects:
1) The consignor, which should be in strict conformity with the drawer of the commercial invoice;

34. 2) The consignee, which should be the same with the buyer in the commercial invoice in terms of name and address in case no description of the consignee in the airway bill;
3) Marks, description of goods, quantity, gross weight and measurement should agree with those in the commercial invoice and other documents;
4) The air freight and the its payment ( prepaid or to be collected)；
5) The signature of the carrier or the carrier’s agent and the signature’s compliance.

35. 2.4 Definition of a Railway Bill
A Railway Bill ( RWB) or cargo receipt will be issued when the cargo are transported by rail, which acts as a contract between railway carrier at the place of cargo receipt and the related consignee and the evidence of liabilities and obligations of parties involved.

36. 2.5 Functions of a Railway Bill
A Railway Bill is in duplicate and only functions for transport contract and cargo receipt.

37. 2.6 Essentials of a Railway Bill
The bank will check the railway bill in accordance with the commercial invoice related in the following essential aspects:
the consignor, which should be the drawer of the commercial invoice;

38. the consignee, which should be the applicant of the L/C, the consignee designated by the L/C or the buyer in the contract, provided that the consignee dose not been specified in the L/C and other documents involved;
Marks, description of goods, numbers of items, packing and the total items should agree with those in the commercial invoice;
The confirmed weight and the total weight should be the same with gross weight in the commercial invoice.

39. 3 Multimodal transport documents
International Multimodal Transport derives from the booming development of international containerization since 1950.
3.1 Multi-modal Transport and characteristics
International Multi-modal Transport is the transportation of unit loads in such a way that they can be transferred between two or more modes successively with the minimum of remanding by International Multi-modal Transport Operator （MTO）.

40. 3 Multimodal transport documents
The characteristics associated with International Multi-modal Transport can be found as the followings:
Two or more modes of transport must be adopted, in which maritime shipping is a necessity.
MTO is liability for the whole voyage upon issuing the international Multimodal Transport Document.

41. 3 Multimodal transport documents
3.2 Characteristics of and contents in Multi-modal Transport Document
The multi-modal transport document (M.T.D.) is a document which evidences the combined transport contract and indicates that the multi-modal transport operator shall take over the goods and shall be responsible for delivering the document according to the clause in the contract.

42. 3 Multimodal transport documents
Characteristics attributes to the M.T.D. are:
1) Two or more successive modes of transport are undertaken;
2) The liability of M.T.O. ranges from the receipt to delivery of the said cargo;
3) The bank can accept the M.T.D. in terms of vessel name, port of loading and port of discharge with “intended” and similar expressions;
4) FCA、CPT and CIP can make M.T.D. feasible.

43. 3 Multimodal transport documents
A M.T.D. should contain the particulars below:
Cargo description.
M.T.O. business name and address; receipt and delivery time and locations;
Name of consignor and consignee and freight settlement;
Transport modes and cruise;
M.T.D. issuing date and place;
Negotiability claim.
Others necessary.

44. Summary
This charpter deals with the usual shipping documents in international trade including B/L, airway bill, railway bill and multi-modal transport documents, which can be defined as the essential documents in international settlement. Thus it will be of great importance to the smooth implementation of international trade and the completeness of international settlement that we should conceive a proper understanding of the definitions, contents and the functions of these documents. Further, what the banks will review those under L/C will facilitate us to get familiar with the whole process of international settlement in a extensive way.

45. Key Words Marine bill of lading ( B/L) 海运提单 Carrier 承运人
Shipper/Consignor
托运人
Consignee
收货人
Notify Party
通知人
Transferee /Assignee
受让人
Holder
持单人

46. Shipped on Board B/L
已装船提单
Received B/L
备运提单
Clean B/L
清洁提单
Unclean B/L
不清洁提单
Named B/L
记名提单
Order B/L
指示提单
Blank B/L
不记名提单

47. Freight Prepaid B/L
运费预付
Freight to Be Collected B/L Bill of Lading 运费到付提单
Master B/L
船东提单
House B/L
货代提单
Ante-dated B/L
倒签提单

48. Airway Bill （AWB）
空运单
Railway Bill
铁路运单
Multi-modal transport
多式联运
Multi-modal Transport Operator （MTO） 多式联运的经营人

49. Document WHAT EXPORT SHIPPING DOCUMENTS DO I NEED?
vary widely according to the country of destination and the type of product being shipped.
Failure to comply can delayed or end payment; goods could be seized or you could be fined, denied further export privileges, or jailed.

50. Most Commonly Required Documents
U.S. Shipper's Export Declaration
Used by the U.S. Census Bureau to compile trade statistics and to help prevent illegal exports.
The SED and instructions on how to fill it out are available from a variety of sources including the U.S. Government Printing Office ( ) and the U.S. Census Bureau's home page.
Do I Need to Submit an SED for My Shipment?
Required for any shipment valued at $2,500 or above (If the shipment is valued at over $2,500 but is made up of various commodities falling under several Schedule B numbers none of which is valued at $2,500 or higher, no SED is required.)
Required for any shipment to particular countries, such as Cuba, Libya, and North Korea, and for any shipment requiring a validated export license.
Required for shipments to Puerto Rico, the U.S. Virgin Islands and the former Pacific Trust Territories even though they are not considered exports (unless each Schedule B item is under $2,500).
Shipments to Canada do not require an SED. (Shipments to third countries passing through Canada do need an SED.)
Sample

51. Bill of Lading
Def.: “Document issued by a carrier to a shipper, signed by the captain, agent, or owner of a vessel, furnishing written evidence regarding receipt of the goods, the conditions on which transportation is made, and the engagement to deliver goods at the prescribed port of destination to the lawful holder of the bill of lading.” “Both a receipt for merchandise and a contract to deliver it as freight.”
Contract among three parties to provide transportation of cargo
Consignor -party delivering goods to the carrier; usually the seller
Carrier - party accepting legal responsibility to provide transportation; often the transportation company
Consignee - party entitle to receive the cargo; buyer, bank, an agent

52. Types of Bill of Lading Straight bill of lading:
Indicates that the shipper will deliver the goods to the consignee.
Document does not give title to the goods. It is non-negotiable.
Consignee need only to identify himself to claim the goods.
Often used when payment for the goods has been made in advance.
for ocean bill of lading) or

53. Shipper's order bill of lading:
Def. Title document to the goods, issued “to the order” of a party, usually the shipper, whose endorsement is required to effect its negotiation. Title remains with whose order it is made out to. If made to ‘to order’ title remains with shipper –until it is endorsed.
Commonly used for letters of credit transactions.
Negotiable and the surrender of the original, properly endorsed (by the shipper), is required for delivery of the merchandise.
Title remains with whose order it is made out to. If made to out ‘to order’ title remains with shipper –until it is endorsed.
The customer usually needs the original or a copy as proof of ownership to take possession of the goods.

54. Air waybill - carrying agreement between the shipper and the air carrier.
In contrast to the ocean bill of lading it is a non-negotiable instrument and serves as a shipping contract and receipt to the shipper.
certifies that the airline has accepted the goods as listed on the air waybill and agreed to carry the goods to the airport of destination in accordance with the conditions of the contract.
Sample for airway bill of lading) Or

55. Export Packing List
itemizes the material in each individual package and indicates the type of package: box, crate, drum, carton, and so on.
shows individual net, legal, tare, and gross weights and measurements for each package (in both U.S. and metric systems).
The list is used by the shipper or forwarding agent to determine the total shipment weight and volume and whether the correct cargo is being shipped.
Sample

56. Certificate of Origin
Some nations require a signed statement as to the origin of the export item.
Available through chamber of commerce.
May be required even though the commercial invoice contains the information
Sample

57. DELIVERY OF THE GOODS TO THE OWNER WITHOUT A BILL OFLADING
Under the contract of carriage, the carrier must deliver the goods to the holder of a properly endorsed bill of lading, regardless of the capacity in which he holds the bill. Failure to do so will make the carrier liable for breach of contract to the lawful holder of the bill.
The carrier will not normally know who the owner of the goods is, nor is he obliged to investigate this matter; his obligation is merely to deliver the goods to the lawful holder of the bill. For the carrier, the rights of the holder of the bill towards the goods are not relevant. This person can be either the seller who kept the bill because the buyer failed to make the payment, the buyer who acquired the bill after payment or an agent for either of these parties. The lawful holder of a bill can even be the bank acting as pledgee. The carrier cannot and should not get involved in examining all these relationships. All the carrier should do is to check with due care whether the person presenting the bill is its lawful holder and deliver the goods to the lawful holder in exchange for the bill of lading. In the words of Leggatt LJ in The Houda, ‘delivery without production of the bill of lading constitutes a breach of contract even when made to the person entitled to possession’.

58. In Japan, the courts have adopted a practice that runs counter to the nature of the bill of lading as a document of title. Japanese courts approve the practice of delivery of the goods without a bill of lading so long as the goods are delivered to the owner of the goods; the carrier will be liable only if the goods are delivered to the wrong person. This practice is contrary to the nature of a bill of lading as a document of title because a bill of lading embodies the right to receive the goods from the carrier which may exist independently of the property rights; ownership of the goods is not relevant to the right to receive them from the carrier.
The carrier is not justified in delivering the goods to a cargo unless the bill of lading is produced, even if the carrier knows that he is the owner of the goods. Besides legal reasons, there can be practical reasons for this rule. For example, if the holder of a bill of lading is a freight forwarder, he can have a right of lien on the cargo if the cargo owner fails to pay him the agreed fee and/or costs. In such a case, the carrier will be liable to the freight forwarder for delivery without production of a bill of lading, even if delivery is made to the lawful owner of the goods. This kind of situation may not often arise in practice, but the principle should be clear.

59. CARRIER’S LIABILITY FOR DELIVERY OF GOODS WITHOUT A BILL OF LADING
The carrier must not deliver the goods in any way other than against presentation of an original bill of lading. The carrier who delivers the goods without production of a bill of lading, he does so at his own risk. If the goods are delivered to a person who was not entitled to receive them, the carrier will be liable for breach of contract and for conversion of the goods. The carrier who delivered the goods without production of bill of lading has a right of action for the recovery of the goods or their value against the person to whom delivery has been made.
There are some exceptions to the rule that the consignee must present the bill of lading before delivery. The carrier might deliver the goods without production of a bill of lading if it was proved to his reasonable satisfaction both that the person demanding delivery was entitled to possession of the goods and that there was some reasonable explanation of what happened to the bill of lading. However, carriers should be very cautious with respect to this exception, until it is clarified with greater precision